How SAP and Deloitte are teaming up to unlock big business benefits with Central Finance for their customers
Expectations for the finance function just keep rising. Internal stakeholders increasingly want data and insights they can use to drive better decisions amid a constantly disrupted business environment. Customers and third parties demand accurate, up-to-date information and frictionless engagement with finance-related processes. And regulators continue to hold businesses to the highest standards when it comes to financial reporting.
For organizations across industries today, financial data, processes, and systems can remain fragmented. A truly centralized finance function offers a potential solution to the spate of challenges that finance leaders face. But even as they recognize centralized finance as a business imperative, they may struggle to make it real.
Addressing finance first
At Deloitte, we see that struggle every day as we work with clients across the globe. And we are also seeing a huge opportunity for finance leaders to move to a finance function that can support greater business value. For many organizations, the opportunity comes in the form of SAP S/4HANA, the core ERP that is the successor to SAP ECC and represents the future of ERP for SAP customers.
As part of the SAP S/4HANA journey, SAP customers can take an important first step with finance, getting their financial house in order with harmonized data and processes at the outset— leveraging the Central Finance component of SAP S/4HANA.
Such a “finance first” approach is fundamental to any business transformation. Everything comes back to finance—and finance is critical for driving everything forward. Operational efficiency, customer service, procurement, payroll, employee benefits, strategic business decision-making, enterprise growth—all of it is interwoven with finance. And with SAP S/4HANA Central Finance, organizations can now build a more responsive, accurate, and meaningful finance function—one that supports the business from end to end. And because Central Finance brings a “system of report” capability across data as well as a “system of record” capability for financial processes, it serves as a single engine for insights and transactions.
Shining a light on value
Despite the standardization that can come with SAP S/4HANA and Central Finance, each organization’s journey is different. Their realities, needs, aspirations, and expectations are different. Consider two very different stories among Deloitte clients—and the lessons they can provide for other organizations moving forward with SAP S/4HANA.
Both of these organizations— a global technology and telecom company and a health and nutrition leader—have collaborated with Deloitte to unleash the potential of Central Finance through a “finance first” approach. And the work has garnered some of the highest accolades from SAP. Deloitte’s work with both of these organizations was singled out by SAP in November, earning us two Central Finance Top Gun Awards.
The 2022 Central Finance Top Gun awards represent a first for SAP, which has been hosting the Central Finance Top Gun event for several years. This unique annual event brings together leaders from SAP and its partners, including Deloitte, to explore the latest possibilities with Central Finance. From new solution functionality to leading practices to real-world SAP customer stories, the Top Gun event provides SAP partners with two things. First, it allows organizations such as Deloitte to showcase our strength with Central Finance and demonstrate how we are helping customers realize tangible business value—while also learning from the successes of other SAP partners. Second, it gives us a clear view of what’s coming down the road for Central Finance.
In taking home two awards from the event—for our work with the tech/telecom company and the health/nutrition organization—the Deloitte team gained a lot more than fresh insights into Central Finance. We left knowing that what we are doing for SAP customers matters. The award validates our finance first approach, our extensive capabilities to support SAP-enabled transformation, our strong relationship with SAP partner product for non-SAP integration , Insight software (Magnitude), and our ability to help clients achieve business outcomes.
The power of one
What do those outcomes look like? For the tech/telecom company the outcome was unparalleled in the market—with the greatest number of integrations, within a record timeline. The project involved helping the company move nearly 40 SAP and non-SAP ERP systems, as well as hundreds of legal entities, to a single Central Finance environment across dozens of countries. The bigger outcome? With a new global Central Finance environment, the company can now report internally using common definitions (in a new data model) across its financial landscape comprised of multiple disparate systems. With a single reporting platform and a single view for finance, the company has introduced consistency across financial data and processes.
For Deloitte’s part, our experience and ability to operate under extremely tight deadlines were keys to success—along with our vendor relationships, clean ERP methodology, and proprietary transformation toolsets. Another big key to success: the tech/telecom company’s impressive ability to collaborate globally across all of its entities, ensuring that all parties were on the same page and that they had what they needed to make the project effective.
Two lasting lessons from this massive project: (1) It is never too soon to start profiling your legacy data, targeting inconsistencies, and addressing them. Data quality can be a larger challenge than you realize, often consuming more time and resources than expected—which can delay your move to SAP S/4HANA and Central Finance. (2) Be diligent about defining your common information model. For example, what qualifies as a “service,” and how do you define a service globally?
For another SAP customer, a health and nutrition company, the potential of Central Finance was equally compelling—as an opportunity to evolve. The company has a history of evolution,transforming over the years to become an industry leader. With Central Finance, the company has recognized an opportunity to evolve beyond its legacy systems, which do not support a shared data model and make it difficult to get a harmonized view of finance.
Getting more granular, real-time insights has been a growing priority for the company—and one that Central Finance can now support as a system of report at the company, while enabling capabilities such as profit-center accounting across the ERP landscape. With a common data model enabled by Central Finance, the organization can improve cost analysis and drive greater efficiencies across finance—from account reconciliation to corporate close—all while positioning the company for whatever comes next in its evolution.
Making the move to Central Finance—with a common, harmonized data model across nearly 70,000 accounts across multiple SAP systems—would require the company to overcome a major challenge at the beginning. How can you create a common data model without considerable amounts of manual, time-consuming work? The answer that Deloitte presented came in the form of a combination of Deloitte build assets, including our Kinetic Finance Startup solution, which uses machine learning, robotic process automation, and cloud to do the heavy lifting of a finance transformation. More than an intelligent solution for data assessment and migration, Kinetic Finance Startup supports Central Finance implementation by keeping humans in the loop at every step, providing them with early insights into their new financial data landscape, and allowing them to begin working with data right away.
With Kinetic Finance Startup in combination with other specialized assets, the health/nutrition company was able to reduce effort and accelerate timelines across the board. Other keys to success included “common data model” thinking at all levels of the project, which was, importantly, led and owned by Finance rather than IT. An exhaustive approach to data reconciliation also helped propel the project forward and ensure success.
Two blockbuster projects, two different approaches to Central Finance, two different paths to business value. Yet both share a lot in common, including committed teams focused on business results and the future of the enterprise. From Deloitte’s perspective, we see a number of truths connected to these projects and the Central Finance Top Gun awards that we earned for them—all validating our approach and our belief that approaching SAP S/4HANA transformation in “bite-sized chunks” makes business sense.
For one, “innovation” means more than it did just a few years ago. With Central Finance, the path to strategic business flexibility, organic growth, shared services, digital business models, new apps, and other business differentiators becomes easier.
Through these highly complex projects, we also saw the power of collaboration, even as we worked 100% virtually across the globe to accomplish Central Finance work at record time and at record scale, while unlocking the benefits that clients expected and needed.
At Deloitte, we recognize that business is never done. Through our recent Central Finance work, we see clearly that more change lies ahead—that finance leaders across the globe are embracing SAP S/4HANA not as a destination but as part of an ongoing journey to unlock continuous business value.
Not sure how to take the first step or what your next step should be? We’re happy to share additional insights that can help you understand what’s possible with Central Finance and how you can put it to work for your organization. Contact us to get the conversation started.